Cannabis duty – Apply for a cannabis licence from the CRA
The information described on this webpage is based on the Excise Act, 2001 and its regulations including proposed amendments under Bill C-97 , Budget Implementation Act, 2019, No. 1.
- Apply for a cannabis licence
- Register for the cannabis stamping regime
- Calculate the excise duty on cannabis
- Report and remit (pay) the duty on cannabis
- Completing a cannabis duty return
Who should apply for a cannabis licence
You must apply for a cannabis licence under the Excise Act, 2001 if you are:
- cultivating (you grow cannabis products)
- producing (you produce cannabis products)
- packaging (you package cannabis products)
You do not have to apply for a licence in any of the following situations:
- you are an individual who produces cannabis products in Canada for your own personal use in accordance with the Cannabis Act
- you are an individual who under the Cannabis Act produces cannabis products in Canada for your own medical purposes
- you are an individual who produces cannabis products in Canada, and who under the Cannabis Act are a designated person who is authorized to produce cannabis products in Canada for the medical purposes of another individual
- you are an industrial hemp grower who produces industrial hemp by-products
Even if you have a Health Canada licence, you must apply for a CRA cannabis licence for both medical and non-medical (recreational) purposes.
If you will be packaging cannabis products, you must also register for the cannabis stamping regime prior to the sale of any packaged cannabis products.
How long is the cannabis licence valid?
Your licence is valid for a maximum of 2 years. Your licence will not be automatically renewed. To renew your licence, you must apply for a licence renewal no later than 30 days before the expiration date of your current licence. You must continue to meet the requirements of the licence during the period you are licensed.
Eligibility conditions for a cannabis licence
To apply for or renew a cannabis licence, you must meet all of the following conditions:
- You are not the subject of a receivership of your debts
- You have not failed to comply with any Act of Parliament (other than the Excise Act, 2001) or of a provincial or territorial legislature that deals with the taxation or control of alcohol or tobacco, or any regulations under it in the past 5 years
- You have not acted to defraud her Majesty in the past 5 years
- Each individual involved must be at least 18 years of age
- Have a valid business address in Canada
- Provide a list of all premises that will be cultivating, producing and/or packaging cannabis products
- Have sufficient financial resources to conduct your business in a responsible manner
- Hold a valid licence/permit from Health Canada issued under the Cannabis Act
- Provide a business plan (including a business industry overview, operating plan, financial plan or source of funds, and a sales and marketing plan)
- Provide acceptable security to cover one month of cannabis duty liability (minimum of $5,000 and a maximum of $5 million)
The minimum amount of security required for licensees who are only cultivating and/or producing cannabis products would be $5,000. The maximum security amount would be $5 million for cannabis licensees who package cannabis products.
For a new cannabis licence application, security would be calculated as:
[(estimated number of grams of dried cannabis to be sold over the first 12 months x $1 per gram) + (estimated number of milligrams of total THC to be sold over the first 12 months x $0.01)] ÷ 12 months
For a renewal application, security would be the highest amount of cannabis duties payable for a calendar month in the previous 12 calendar months.
If you have specific questions on how to calculate the security amount, send an email to [email protected] or call 1-866-330-3304 .
How to apply for a cannabis licence
You may also need to attach the following to support your cannabis licence application:
After you apply for a cannabis licence
We will review your application to determine if you are eligible for a cannabis licence based on the information provided on your Form L300. We may contact you if we need more information.
Upon meeting the eligibility criteria, we will send you a letter to confirm your CRA cannabis licence approval and tell you your new excise duty program account number.
Your application for a cannabis licence is not an approval to start your business activities relating to cannabis. You can only start to produce cannabis products after you receive licences from both the CRA and Health Canada. For more information on how to register with Health Canada, go to canada.ca/cannabis.
Your responsibilities as a cannabis licensee
As a cannabis licensee, you must:
- Register for the cannabis stamping regime (if you are packaging cannabis products for final sale)
- Calculate the duties imposed on cannabis
- Report (send) and remit (pay) the monthly duty payable on cannabis using Form B300, Cannabis Duty and Information Return
- Report your unpackaged and packaged cannabis product inventories using Form B300
- Keep all your supporting documents for at least 6 years to support all aspects of your operations
- Apply for a licence renewal at least 30 days before the expiry of your licence (your licence is valid for a maximum of 2 years)
You must tell us immediately if any information you provided in your licence application has changed or is no longer accurate. For the contact information of the regional excise offices, go to Contact Information – Excise Duty, Excise Taxes, Fuel Charge and Air Travellers Security Charge.
Conditions to suspend or cancel your cannabis licence
The CRA can suspend or cancel your licence if you no longer meet the conditions to be a licensee. These reasons include but are not limited to:
- You are bankrupt
- You stop cultivating, producing or packaging cannabis products
- You fail to comply with any Act for the taxation or control of alcohol or tobacco
- You act to defraud Her Majesty
- You fail to notify the CRA of any changes to your licensing information as required by legislation
If a change of legal entity occurs (for example, a proprietorship incorporates), you would have to apply for a new licence using Form L300 and your existing cannabis licence would be cancelled.
If a licence is not being cancelled at your request, the CRA will send you a written notice at least 90 days before the proposed cancellation date of your licence. You have 90 days from the date of notification to provide the reason why the licence should not be cancelled.
Find out who should apply for a cannabis licence, how to apply and what to do after you apply for a cannabis licence.
How to Get a Grower’s License for Medical Cannabis
Currently, 33 states and the District of Columbia approve medical marijuana , but the plant remains illegal on a federal level. If you happen to possess a bit of a green thumb and have also been approved for a medical marijuana certification, then you may discover that applying for a grower’s license is the way to go.
Although most states do allow the cultivation of cannabis crops for personal use, for those who would like to make a business out of their growing experience, the proper licensing and regulation is necessary. Running a medical cannabis operation is not for everyone, but if done well, it can prove to be profitable after the initial payments of the gear, lighting setup , seeds, growing media, licenses and more are paid for.
It is important to note that just because your state recognizes medical marijuana as legal does not mean it permits commercial growing or even cultivation on a personal use level. Nevertheless, for those who are passionate about their cannabis business and want to take it to the next level, obtaining a grower’s license is the only legal way to go.
Keep reading to discover how to get a grower’s license for medical marijuana with our general guide…
Know How Much Medical Marijuana You Can Already Grow
Most states that recognize medical marijuana also approve a certain quantity of plants that can be cultivated for personal use. These are small scale grows and do not require any licensing other than a valid medical marijuana card and some knowledge about the specific laws and regulations in your state. This type of cultivation cannot be executed for profit since your product cannot be sold. There are sometimes loopholes in the laws that state, for example, that cannabis can be gifted or donated to another cardholder, but these acts sit in somewhat of a legal grey area.
Here are the medical cannabis states that allow growing for personal use, along with their limitations:
Alaska (for medical and 21+): No more than 12 plants per household, only up to 2 adults. Up to 1 ounce can be transported.
Arizona (medical only): Up to 12 plants, only if residing more than 25 miles from the nearest dispensary.
California (for medical and 21+): Up to 6 plants per residency may be cultivated for anyone 21+. For medical card holders, up to 12 immature or 6 mature plants. Up to 1 ounce may be possessed.
Colorado (for medical and 21+): Up to 6 plants per person, with only 3 or less in the flowering stage of growth, may be cultivated for anyone 21+. More than 12 plants per residence is not allowed. Those 21+ can possess up to 1 ounce, while CO medical card holders can possess up to 2 ounces.
District of Columbia (for medical and 21+): Anyone 21+ can possess up to 2 ounces. Medical cardholders are also limited to only 2 ounces or less. Anyone 21+ can cultivate legally up to 6 plants, with only 3 or less in a mature stage.
Hawaii (medical only): No more than 7 ounces in possession. Up to 7 plants total for personal cultivation (between patient and caregiver).
Maine (for medical and 21+): Anyone 21+ or a qualifying patient can possess no more than 2.5 ounces. 12 immature plants and 6 mature plants may be grown by Maine residents only.
Massachusetts (for medical and 21+): Anyone 21+ can cultivate up to 6 mature plants, which must be kept out of public view always.
Michigan (for medical and 21+): Up to 2.5 ounces of useable marijuana may be possessed, or up to 12 plants (must be kept in a secure, locked facility). Some additional restrictions apply.
Montana (medical only): Up to 1 ounce in possession. No more than 4 mature plants and 12 seedlings permitted for personal cultivation.
Nevada (for medical and 21+): If residing 25 miles or more away from a dispensary: those 21+ can grow up to 6 plants, or 12 plants per residency. Cardholders 25 miles or more away from a dispensary can grow up to 12 plants mature and/or immature.
New Mexico (medical only): Up to about 8 ounces may be possessed. Those who apply for a Personal Production License (PPL), may grow up to 12 seedlings and 4 mature plants.
North Dakota (medical only): Up to 3 ounces are permitted for possession. If the patient resides more than 40 miles from the nearest dispensary, they are allowed to grow up to 8 plants.
Oregon (for medical and 21+): Anyone 21+ can possess up to 8 ounces of marijuana, while patients can possess up to 24 ounces. Anyone 21+ can cultivate no more than 4 plants per residence, while patients can grow up to 6 mature plants.
Rhode Island (medical only): Up to 2.5 ounces of useable cannabis allowed for possession. Up to 12 mature plants allowed for personal cultivation, as long as the facility is indoors.
Vermont (for medical and 21+): Up to 2 ounces of useable cannabis for patients. No more than 7 immature and 2 mature plants may be grown per patient.
Washington (for medical and 21+): Up to 6 plants per personal use can be cultivated by patients, in addition to no more than 8 ounces of consumable cannabis in possession from the crops.
Why Should You Grow Medical Marijuana for Personal Use?
In the long run, cultivating your own cannabis for personal use can save you big bucks, and you will be able to customize the exact type of herb you would like to consume. Even if the acceptance of cannabis around the globe is increasing, this medicinal herb can still certainly cost you a pretty penny, and in some areas no dispensary close by will stock the exact strain type you might desire.
By setting up a small-scale operation that meets the legal criteria for what is permitted within your state of residence, you can achieve the weed you want and start collecting savings in the long run.
Additionally, all the effort, determination and luck that goes into achieving a grower’s license for medical marijuana might not be your cup of tea. The states that allow cultivation for personal use make it simple for patients who want to grow their own to do exactly that.
For Those Who Want a Grower’s License for Medical Marijuana
In all reality, the process of applying for a grower’s license begins with understanding whether or not the state you reside in even permits commercial cultivation licenses. Not all medical marijuana states are accepting applications either, so it is important to read up on the laws where you live and see if the timing is right for your application to await approval. The acceptance of applications on a state-by-state basis is always changing, so contact your commissioner directly for the most accurate information.
The next step is to submit an application if your state is accepting. Unfortunately, most regions have limited spots, which means you need your application to stand out. Even those who are passionate about their company and its purpose are not guaranteed a way in, so if you really want to make the grower’s license for medical marijuana happen, you’ll have to give it your all. Be sure to have all the required documents in place; every state wants something different in their applications. Most states have timelines in which the application must be submitted.
Be sure to have all your necessary licenses, employees and authorizations in place before applying as well.
Most importantly, remember that it will take a while to go from applying for your license to hopefully scoring one, and then to actually opening up the operation and beginning to produce medical cannabis on a commercial scale. If this tedious process does not sound up your alley, do not apply. Give that limited spot to another marijuana company that might want it. Consider opting for personal use cultivation, in correlation to the laws and regulations mentioned earlier in this article.
Final Thoughts on Getting a Grower’s License
The process of obtaining a grower’s license for medical marijuana is no easy task, but ultimately if you envision yourself opening a medical cannabis related operation and are willing to put in the hard work, then it is worth submitting an application.
Many individuals are not aware that, even if you do not apply for a grower’s license, some states allow the cultivation of herb for personal use, so long as there is no intent to sell or distribute the product in any manner. Decide what option is right for you, whether it be simply growing a small number of plants at your home, or turning cannabis into a full-blown business.
We hope you found this article to not only be entertaining, but also educational and informative. It is important to remember that the consumption of marijuana is the sole responsibility of the user, and discretion should always be taken.
Getting a little excited about business prospectives? Here is a general guide on how to get a grower's license for medical marijuana.